Hopes of a high take-up at the European Central Bank's latest cheap loan offer supported European shares on Wednesday, but fears that any gains might be short lived kept price moves in narrow ranges.

Ireland's announcement that it will hold a referendum on the new European fiscal treaty also undermined some of the positive sentiment, weakening the euro slightly.

The markets are expecting a large number of banks to borrow around 500 billion euros ($671 billion) of the three-year money, and that a lot of this liquidity will find its way into riskier assets as well as easing pressure on bank balance sheets.

It all depends on the size of the take up. I think the market will be happy with 500 billion euros, the banks have been responding quite well to improving credit conditions and share prices have been highly correlated to it, Colin McLean, managing director at SVM Asset Management in Edinburgh, said.

The FTSEurofirst 300 index of top European shares opened up 0.2 percent at 1077.93 points, while MSCI's world equity index was up about 0.3 percent after Asian stocks rose to a seven-month high earlier in the day.

The euro was slightly lower $1.3452, just below a near three-month peak of $1.3487 set on Friday, but is on track for a 3 percent gain this month, its best performance since October.

Commodities like copper, gold and silver were all firmer as were commodity currencies such as the Australian dollar.

Safe have German government bonds eased due to the positive influence of the ECB tender on other assets. The results of the offer are due to be announced at around 1020 GMT.

Oil prices were also recovering after sharp losses on Tuesday with Brent crude trading just above $122 a barrel. Oil has risen sharply this year, raising concerns over the global growth outlook.

(Additional reporting by Joanne Frearson; editing by Anna Willard)